Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)Headline CPI in October was flat m/o/m and up .2% m/o/m ex food and energy, both one tenth below expectations. The y/o/y increases are now 3.2% and 4%, headline and core vs 3.7% and 4.1% in the month prior. Energy prices kept a lid on the headline with a 2.5% m/o/m drop and lower by 4.5% y/o/y. Food prices grew by .3% m/o/m and by 3.3% y/o/y. Services inflation ex energy was up .3% m/o/m vs .6% in September and .4% in August. It's up 5.5% y/o/y. On the goods side, and where most of the disinflation is taking place, core goods prices fell by .1% m/o/m and up by .1% y/o/y.

2)Producer prices in October fell .5% m/o/m, much more than the estimate of an increase of up .1%. The core rate was unchanged m/o/m. Versus last year, prices are higher by 1.3% and the core rate by 2.4% which continues the moderation in price increases that we’ve been seeing. The BLS said that “over 80% of the October decline in the index for final demand goods is attributable to a 15.3% drop in prices for gasoline.”

3)Import prices in October were down by .2% m/o/m vs the estimate of down .3%. Price declines m/o/m were seen for capital goods, industrial supplies, consumer goods and food/beverage.

4)Core retail sales in October were as expected, up .2% m/o/m and with September revised up by one tenth and August down by a tenth. What is apparent again is the bias towards spending on non-discretionary items and much less so on discretionary.

5)The always volatile NY manufacturing November index rose to +9.1 from -4.6 in October and that was better than the estimate of -3.0. It compares with +1.9 in September. Under the hood though and it was a much more mixed bag. Also of note was the collapse in the 6 month outlook to -.9 from +23.1 and that is well under the 6 month average of +16.9.